While people discussing about the difficult math questions got asked during HF interviews for quant trader by some shop, however, I wonder if they also interview seasoned quant trader this way as well? Do they really care for solving that unrelated math question when one has a track record of making millions on their book? In particular, those questions have little relation with what they actually do on the job.
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Based on the most helpful WSO content, it's clear that the interview process for quant traders, regardless of their level of experience, often includes technical and mathematical questions. This is a common practice across many top quant firms and hedge funds, including those mentioned like Jane Street, Two Sigma, and Citadel. The rationale behind this approach is multifaceted:
Assessment of Fundamental Skills: Even experienced traders are tested on their mathematical and statistical reasoning skills. This ensures that they have a solid foundation in the core principles that underpin quantitative trading strategies.
Problem-Solving Abilities: Complex math or brainteaser questions are used to evaluate a candidate's problem-solving skills. These questions may seem unrelated to day-to-day trading activities, but they help interviewers gauge how a candidate approaches unfamiliar problems, thinks critically, and handles pressure.
Cultural Fit and Intellectual Curiosity: Many top quant firms value a culture of continuous learning and intellectual curiosity. By asking challenging questions, firms can assess whether a candidate is genuinely interested in exploring complex problems, even if they are not directly related to trading.
Standardized Evaluation Process: To maintain a fair and consistent evaluation process, firms often apply the same rigorous standards to all candidates, regardless of their experience level. This helps ensure that all potential hires meet the high standards expected by the firm.
While it might seem counterintuitive to ask seasoned traders to solve complex math problems that appear unrelated to their practical experience, these questions serve as a proxy for assessing a range of skills and traits that are valued by quant firms. However, it's also likely that the interview process for experienced traders will take into account their track record and practical experience in the industry, alongside their performance in technical interviews.
Sources: So you want to be a Quant?, https://www.wallstreetoasis.com/forum/job-search/qa-undergraduate-quantitative-trading-decision-process-advice?customgpt=1, Q&A: Top Quant Firms First Year Comp 250k to 400k, Q&A - Quant with 2 yrs exp in Europe both buy/sell side, Q&A: Top Quant Firms First Year Comp 250k to 400k
I think it's unlikely experienced quant traders with strong individual pnl track records are getting asked these sorts of questions often or that much weight is being put on these answers in the rare cases the questions are asked although a strong track record would probably be more like tens of millions in pnl than a few million. However, I do see these questions sometimes being asked to experienced quant traders if they are members of desks where pnl is assigned at the desk level and it's not super clear how much their individual contributions are so there is more emphasis on technical ability and less expectation that such hires would be able to directly make similar pnl to the old desks.
Then why do the shop asks for track record when we know it's difficult to segregate desk PnL to personal PnL? And if it's so difficult to do the separation, being technically competent also says nothing about their potential contribution to PnL too? I'm very confused how do the trading industry recruitment works in this case. Would like to have your opinion?
I think attribution of pnl within a desk is very firm dependent so it's hard to describe all the possible ways this is done unless there are explicit sub books managed by sub PMs. I know some large single manager quant firms have systematic ways of assigning pnl contributions although I imagine this varies quite a bit firm to firm. In many cases if an individual only works on feature engineering or monetization it's not clear that even if the marginal pnl contribution can be measured accurately they would be able to replicate the pnl contribution at a different firm with different infrastructure. As a made up example at a firm with large equity options business making refinements to how the firm models stock volatility around earnings could lead to millions in additional pnl but a similar refinement wouldn't generate much if any pnl at another firm with a small equity options business.
Obviously neither asking technical questions or asking about these imperfect pnl attributions are super relevant but many firms are very selective when making external hires as the uprfront cost is quite high if the candidate has lots of deferred comp/long non-competes so I think they hope for candidates who are strong technically and can plausibly claim to have made good contributions in their previous roles. If someone previously worked with the candidate and gives a strong recommendation that also carries a lot of weight as that is more relevant than those sort of questions.
unfortunately yes this does happen at the sub-PM level and lower. I think it's very dumb to put too much stock in these questions. It's like asking an attending surgeon with 5 years experience how to do organic synthesis. 100% of the time without consistent practice, he's forgotten everything he learned in college chemistry and would probably google the answer if he ever needed the information on the job.
yes this is a good analogy. Even layman can tell potentially it's just the fresh grad who could do it well as the materials are still fresh in their mind. It seems counterintuitive to me that they would prefer fresh grad over experienced professional, unless they need a constant supply of newbies to satisfy their ego as mentors/teachers or whatsoever, but that simultaneously contradict with what i understand from the buy-side, where they wish you could vent for yourself.
I think there several reasons firms like hiring new grads:
I think the real purpose of these questions is to keep the existing people from leaving. It doesn't matter who gets hired for the role and any of the candidates are fine, but people are discouraged from trying to leave if they have to spend months grinding interview questions, so they can be paid less. This dynamic is exactly what happens in the tech world, it's the modern form of the anti-poaching agreements from 10-15 years ago that the firms paid a big settlement for. The quant industry is very corporatized now and the big firms essentially collude in different ways to keep the wages down.
ah this is a very refreshing viewpoint indeed! Meanwhile, AFAIK, it seems people are already difficult to leave when their bonus are spread across multiple years, and also all kinds of non-compete and buyout things already discourage people from jumping boat?
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